iBeacons Usher In The Contextual Shopping Era

If the writing was not on the wall already that the use of proximity-aware beacons was the future of retail, now we have some data to back it up.

According to a study by inMarket, the use of beacons (Apple brands these as iBeacons, and has already shipped millions of capable devices) in retail stores caused a 19x increase in interactions with advertised products, a 16.5x increase in app usage in-store and a 6.4x increase in the likelihood that a shopper kept an app that sent them a beacon message on their phones.

Those stats are incredibly impressive. inMarket says it measures interactions in that customers are picking those physical products up and scanning barcodes. There’s no info about raw numbers, of course, but if those improvements could be tacked onto existing mobile efforts, marketers have a huge opportunity here.

InMarket, an ad platform that now focuses on mobile and beacons, rolled out one of the biggest networks of these proximity-sensitive devices to retail shoppers earlier this year and has continued to expand its installs. InMarket conducted the study in a controlled sample of 25,000 shoppers over 30 days in April and May of this year, using apps that had its Mobile to Mortar framework installed.

Beacons installed inside retail stores like Saks or grocery outlets can send proximity-based alerts to shoppers at the precise moment — and location — that they’re enabled to make a decision on a purchase. This is the holy grail of retail advertising, which normally takes a scattershot approach to ‘pre-advertising’ shoppers or tries to guesstimate when they’re in the vicinity of a product.

When a beacon knows you’re within a couple of feet of a Zatarain’s rice mix and sends you a coupon, that can be much more effective than trying to mail you a coupon a month earlier in the off chance that you might be in the mood for creole.

These initial inMarket statistics are enormously promising for retailers anyway.

The Contextual Shopping Era

“This is the first data gleaned from a beacon rollout at scale that proves beacons WILL become commonplace and accepted by users when implemented correctly,” inMarket CEO Todd Dipaola said in response to questions from TechCrunch. “There will be some winners and losers in rolling out successful beacon strategies. The winners will help your phone behave like a concierge with personalized answers and advice just as you need it. Others who try to make phones into a used car salesman and send pushes just because they can, will have trouble reaching an audience.”

This idea that you don’t have to hunt around proactively for coupons or deals follows an idea I’ve been tracking for a while — that contextual data pushed to users is the future of mobile. The precision that beacons offer, combined with data from advertisers, manufacturers and retailers, will make this stuff more effective and less annoying.

Rather than smashing you with notifications just because you may be near a store, the laser precision of a beacon notification uses contextual signals to talk to you when it matters the most.

Note, of course, that I’m talking mostly from the viewpoint of an advertiser or marketer here. I’m not completely comfortable with the extent of the data and context advertisers will have on me within the next couple of years. Nevertheless, the ‘pro’ of it is that you’ll get bombarded less with crap that doesn’t really matter. And if you’re concerned about your location being tracked then you should probably stop carrying a smartphone.

I’m sure that consumer advocacy groups and Congress watchdogs will have a lot of work to do regulating this field over the next few years.

Dipaola notes, in keeping with Apple’s move to randomize device IDs on WiFi networks , that moving off of WiFi tracking (which has no privacy controls) and onto beacons actually has some distinct privacy benefits.

“For retailers, beacons not only improve the shopper experience, but allow privacy by design store analytics. iOS 8 will end wifi in-store analytics, in favor of opt-in solutions like beacons.”

Anyhow, back to where this could lead us. We asked Dipaola to describe what a store experience might look like in a context-aware beacon-ready future.

Let’s go grocery shopping in 2020 for a moment. It’s just 5 ½ years away, but it could be dramatically different. You walk into the store, let’s say the produce section, and are reminded about which apples are in season and are ripest this week, how much they weigh and how much they will cost. Since you previously favorited a recipe for apple pie, an inMarket beacon pings your device with a personalized offer for pie crust. You head over to the freezer aisle and pick up ice cream — where your BLE fitness app informs you that because you did 4 miles on the treadmill that morning, you can fit a few ounces of vanilla into your daily calorie budget. As you head over to the cereal aisle, thanks to proximity, your list/pantry app informs you that your wife added Special K to the list this morning. Oh, and watch out for X cereal because you’ve indicated you’re allergic to nuts. Finally, you exit the store through EZ-Pass-style payment lanes that use BLE payments to debit your card, so no more waiting on line. Just show your receipt as you walk out the door.

DiPaola says that everything described is possible with beacons and mobile hardware, and that inMarket’s data shows that shoppers actually want that stuff.

And it’s not just retail stores, either.  Eventbase, Urban Airship and the Mobile Marketing Association are blanketing the Cannes Lions Festival — an atavistic tribute to marketing manipulation held in France this week — with beacons that will trigger polling and surveys from the festival’s official app. The app will also enable attendees to keep track of each other in real-time with the ‘Around Me’ feature in the culmination of a thousand ‘local social’ wet dream concept apps.

The heavy presence in the app and at the event is no accident, of course. Beacons are considered the next frontier for marketers, and demonstrating their precision and power at the hot industry event of the year is savvy for companies like Eventbase and Urban Airship, who are tapping into the field.

I’m not sure how okay I am with the way that the contextual shopping era is shaping up, but it’s coming.